STOCKS on Wall Street hit record levels on Thursday as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the US economy overcome a steep pandemic-induced downturn.
The Dow, S&P 500 and Nasdaq all set new highs amid growing calls for President Donald Trump’s removal – one day after Trump supporters stormed the US Capitol in a harrowing assault on American democracy.
The Dow Jones Industrial Average rose 211.73 points or 0.69% to 31,041.13, the S&P 500 gained 55.65 points or 1.48% to 3,803.79 and the Nasdaq Composite added 326.69 points or 2.56% to 13,067.48.
US House Speaker Nancy Pelosi urged Trump’s immediate removal from office. President-elect Joe Biden accused Trump of fomenting violence and said Wednesday was one of the darkest days in US history.
“The market is now looking past Trump and it’s looking forward to a Biden presidency, more structure and stimulus,” said Dennis Dick, a trader at Bright Trading LLC.
“A Democratic Congress is going to obviously be more concerned about the small businesses and the Main Street.”
Economy-linked financials rose 1.5% while industrial and materials sectors hit new records on expectations Biden will line up a bigger fiscal package and boost infrastructure spending with Congress under Democrat control.
Rate-sensitive bank shares gained 2.6%, tracking another surge in the benchmark 10-year US Treasury yield above 1%.
Plain vanilla growth stocks, relatively speaking, are less likely to benefit from more stimulus spending, according to David Bahnsen, chief investment officer of The Bahnsen Group in Newport Beach, California.
“Overall value-type stocks probably do better than growth,” Bahnsen said. “On the margin, if they’re going to go get another US$1 tril and push bond yields higher and the slope of the yield curve steeper, banks are going to benefit.”
The S&P 500 technology index rose 2.7%, more than making up for losses a day earlier when shares of some of the biggest technology companies dropped on fears of increased regulation.
The NYSE FANG+TM index which includes the core FAANG group of stocks that have led the Wall Street rally from pandemic lows gained 2.7%.
The number of Americans filing for jobless benefits unexpectedly dipped last week, while staying elevated, a Labour Department report showed, with the job market recovery appearing to stall as the COVID-19 pandemic threatens to overwhelm the country.
Electric-car maker Tesla Inc jumped 7.9% to a record high, with its chief and billionaire entrepreneur Elon Musk surpassing Amazon.com Inc’s top boss Jeff Bezos to become the world’s richest man, according to a report.
Advancing issues outnumbered declining ones on the NYSE by a 1.72-to-1 ratio; on Nasdaq, a 2.98-to-1 ratio favoured advancers.
The S&P 500 posted 103 new 52-week highs and no new lows; the Nasdaq Composite recorded 346 new highs and three new lows. – Jan 8, 2021
